Premiums are going up for small group and individual health insurance across the state and in Western New York – but not by nearly as much as insurers had requested.
The state Department of Financial Services on Wednesday announced it had approved health insurers’ premium rate increases for 2023, with some tweaks. The state reduced insurers’ requested rates by 48% in the individual market and by 52% for small groups, collectively saving the more than 1.1 million New Yorkers enrolled in those plans a total of almost $800 million, the department estimated.
Here’s how that shakes out in Western New York:
- The entity that includes Highmark Blue Cross Blue Shield of Western New York had sought a 20.5% increase for individuals – 6,457 people enrolled in those plans – but the state accepted an increase of 12.8% instead. For small group plans, which cover employers with up to 100 workers, Highmark had requested a 15.3% increase, with the state approving an increase of 10.7%. Highmark has 74,726 members in its small group plan.
- Meanwhile, Independent Health requested a 10.2% increase for individuals – 7,641 enrolled – and the state accepted an increase of 6.1%. On the small groups, of which Independent Health lists 26,217 members, the insurer requested a 15.9% increase, but the state approved a 12.9% jump.
- Excellus Health Plan, which includes Univera Healthcare, had sought 14% increase for individuals – 26,562 enrolled – and the state accepted an increase of 10%. For small group plans, for which Excellus listed 154,316 members, the insurer wanted a 12.9% increase, but the state approved a 9.4% boost.
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The rate adjustments affect people who buy individual commercial health insurance and small employers with 100 or fewer full-time workers, together comprising a small slice of members for the three big local insurers. The rate increases, which do not affect large employers with more than 100 workers, highlight how rising medical costs and inflation are putting upward pressure on premiums.
Two of Western New York’s largest health plans reported 2021 financial results on Tuesday: Highmark Western and Northeastern New York reported a loss of $58 million, while the health plan that includes Univera Healthcare reported about $118 million in income.
The state said Wednesday that in-patient hospital stays and drug costs continue to be the primary driver of premium rate increases and also noted that medical claims have increased as New Yorkers catch up on pandemic-delayed medical care.
The New York Health Plan Association, which represents 29 health plans, said the rate requests submitted in May were “reasonable and appropriate.”
“Unfortunately, the final approved rates do not fully account for the factors driving underlying health care costs,” association president Eric Linzer said.
Highmark of Western and Northeastern New York, which changed its name from HealthNow New York in 2021 after completing its affiliation with Pittsburgh-based Highmark Inc., reported a $58 million loss on revenue of $3.1 billion last year – its first loss in six years. The insurer grappled with rising costs related to Covid-19, pent-up demand for elective surgeries and sizable information technology expenses related to its affiliation with Highmark.
Highmark spokesperson Kyle Rogers noted that the final 2023 rates for individual and small group plans – about 10% of the insurer’s members – reflect rising medical costs and added that the health plan is working with regulators to target the underlying drivers of health insurance premiums.
Independent Health – which also posted a deficit last year, its first since 2015 – said that after a three-year string of nearly flat rate adjustments, the approved premium increases are in line with national and industry trends. The rate adjustments affect 12.3% of Independent Health’s membership.
When combining the two years of financial performance amid the pandemic, Independent Health came close to breaking even, logging a deficit of just $6.5 million.
“Our 2023 rate adjustments reflect the current economic environment, near-record inflation, and the unprecedented impact the Covid-19 pandemic has had on the region’s hospitals, other segments of the health care delivery system, and health plans,” said Rich Argentieri, Independent Health’s chief sales and marketing officer.
While premiums will go up, he noted that the insurer was able to keep most copayments and deductibles at current levels and increase benefits for preventive prescriptions for most of its plans.
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